California pot shops face next existential crisis

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SAN FRANCISCO (AP) - California's medical marijuana stores, which experienced a boom in 2009 when the U.S. Department of Justice said prosecutions were a low priority and then a bust in the form of a federal crackdown, are facing another existential watershed closer to home.

The California Supreme Court is scheduled to hear arguments Tuesday on whether local governments can ban retail pot dispensaries within their borders. About 200 cities and counties already have, according to the pro-dispensary group Americans for Safe Access, but this will be the first time the state high court weighs in on the question even though medical marijuana has been legal in California for more than 16 years.

At stake is the expansion potential or further contraction of an industry that contributes hundreds of millions of dollars to the state economy but operates without clear statewide guidelines and in conflict with federal drug laws. Many of the local bans were enacted after the number of retail medical marijuana outlets exploded in Southern California in response to the DOJ stating in 2009 that prosecuting pot sales would be a low priority under the Obama administration.

"These places are popping up everywhere, and the typical city that had one or two, two became four and four became 16 or 20," said Jeffrey Dunn, an Orange County lawyer who will be arguing in favor of the local bans on Tuesday. "What has happened as a practical matter is this state law which authorizes the medical use of marijuana, and federal law that prohibits it, has forced cities and counties to be the ones to regulate this like any other entity that crops up in our business districts."

Medical marijuana advocates maintain that the state's medical marijuana laws, the nation's oldest, allow local governments to set limits on dispensaries, but not to outlaw them.

"If it's the case localities can ban, you could end up with the entire southern and middle portion of the state banning dispensaries, which clearly does not promote uniformity throughout the state or safe access" to marijuana, Americans for Safe Access legal director Joe Elford said.

Along with the permissibility of local dispensary bans, the state court's seven justices are being asked to determine if marijuana's federal status as an illegal drug prohibits local governments from explicitly authorizing its distribution at all, as about 50 California counties and cities have.

The rush to adopt bans has lessened over the last 18 months, ever since the four federal prosecutors in California launched a coordinated crackdown on dispensaries by threatening to seize the properties of landlords that leased space to them. Hundreds of pot shops have since been evicted or closed voluntarily.

The arguments come in a case out of Riverside, where city lawmakers used their zoning powers to declare storefront pot shops as public nuisances and to ban them in 2010. The Inland Empire Patient's Health and Wellness Center, part of the explosion of retail medical marijuana outlets, sued to stop the city from shutting it down.

A midlevel appeals court sided with the city, but other courts have come to opposite conclusions. Last summer, a trial judge ruled that Riverside County could not close medical marijuana dispensaries in unincorporated areas because the move did not give the shops any room to operate legally under state law. An appeals court in Southern California also struck down Los Angeles County's 2-year-old ban on dispensaries, ruling that state law allows cooperatives and collectives to grow, store and to distribute pot.

However, in a separate case in Long Beach, an appeals court said federal law pre-empts municipalities from allowing dispensaries.